NOK option bears are out in full force

Despite emerging as a broad-market standout of late, Nokia Corporation (ADR) (NYSE:NOK - 4.64) has attracted a bevy of option bears today. Ahead of tomorrow morning's earnings release, the mobile products maker has already seen roughly 59,000 puts cross the tape -- more than three times its average intraday put volume, and nearly triple the number of NOK calls exchanged.

Most of the action has centered on the April 4.50 put, which has seen about 36,700 contracts change hands. The bulk of the puts traded in one fell swoop, with a block of 30,260 contracts exchanged at the ask price of $0.48, suggesting they were bought. Plus, implied volatility on the back-month option was last seen 3.6 percentage points higher, hinting at fresh initiations.

By purchasing the puts to open, the buyers are expecting NOK to backpedal beneath the $4.50 level within the next few months. More specifically, the buyers will reap a reward if NOK breaches the $4.02 level (strike minus premium paid) within the options' lifetime. However, if NOK extends its upward momentum, the most the traders can lose is the initial premium paid.

Expanding our sentiment scope, we find that today's preference for pessimistic positions is just more of the same for NOK. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.95 stands just 15 percentage points from a 52-week peak, implying that near-term options players are more put-biased than usual at the moment.

Echoing that, just two out of 22 analysts deem NOK worthy of a "buy" or better rating. Likewise, the average 12-month price target on the security sits at $3.23, representing a discount to NOK's current share price. However, that sentiment tide could be shifting, with two brokerage firms lifting their respective price targets this morning.

Technically speaking, the Street's skepticism seems somewhat overdone, considering NOK has outperformed the broader S&P 500 Index (SPX) by more than 63 percentage points during the past three months. Plus, the equity has advanced nearly 185% since touching an multi-year low of $1.63 in July, and is on pace to end the month north of its 10-month and 20-month trendlines for just the second time in nearly three years.

Fundamentally, Nokia has reported stronger-than-expected per-share earnings in three of the past four quarters, Thomson Reuters reports. Another solid earnings showing could spook the lingering bears, translating into a contrarian boon for NOK.